Out-of-District (Special Education) Transportation (continued) Special needs transportation services are primarily provided by the CASE Collaborative, of which the District is a member. The District’s cost is assessed by CASE, determined a year in advance, based on the number of students transported by district members in the current year. Over this past fiscal year, there has been a problem hiring drivers. Since we are mandated to provide transportation services to all out-of-district students, we have had to go outside CASE Collaborative to private companies to ensure all students are offered transportation services to and from their educational institution. The FY26 Recommended Budget reflects a level funded budget to cover the cost of single-student transportation routes that are not able to be serviced by CASE. Under Special Education Transportation, we also cover McKinney-Vento as well as Foster Care transportation. With the increased need to transport these students, the FY26 Recommended Budget reflects a 77% increase to those line items. MCRS and OPEB Expenditures – Admin Code 03 (Finance) Middlesex County Retirement System (MCRS) administers pensions for eligible, non-certified staff. Under state law, it assesses its member districts on an actuarial basis, recognizing the need to pay previously unfunded future pension payments earned during the service time of retirees. As of the most recent actuarial valuation report, MCRS targets annual assessment increases of 6.5% through FY2028, decreasing thereafter to 4.0%, and projects of full funding of its actuarial liability by 2037. MCRS reports that the District’s actuarial value of plan assets is approximately 59% toward full actuarial funding. Meanwhile, the District makes annual contributions to a nonexpendable Trust Fund for the purpose of similarly defraying future health insurance premiums, referred to as Other Post-Employment Benefits (OPEB) for then-eligible retirees. From 2012, the District increasingly contributed toward eliminating its unfunded OPEB actuarial liability. The OPEB Trust Fund is professionally invested to maximize long-term returns and was valued at $9.8 million as of November, 2024. The FY2022 budget initiated a proposal to cap the total of MCRS and OPEB expenditures at an annual rate of 6.5%, to provide for sustainable budgetary growth of these two cost centers and ultimately increase long-term funding toward the District’s OPEB unfunded liability. However, due to the smaller-than-anticipated increase in the MCRS assessment, it allowed the District to restore the annual OPEB Trust contribution to the previously established level of $900+K, while remaining under a combined 6.5% budget impact, as summarized below (in $000s): FY26 Budget FY25 Budget MCRS Assessment $3,779K $3,641K OPEB Trust Contribution 861K 716K Combined Budget Expenditure $4,640K $4,357K Increase over prior year 6.5% 0.72% Debt and Capital-Related Expenditures – Admin Codes 03 (Finance) and 07 (Facilities) Since FY2022, the District has restored spending on additional CIP projects to $700K as recommended for FY25. We are recommending bringing that line item to $1M for FY26.
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